Rush to rein in Google’s mo­nop­oly could back­fire

The US jus­tice depart­ment wants charges be­fore the elec­tion, but a hastily pre­pared case might end up work­ing in com­pany’s favour

The Daily Telegraph - Business - - Business Comment - James Tit­comb

Learn­ing that the US gov­ern­ment is about to charge your com­pany with break­ing mo­nop­oly laws would not nor­mally come as good news. But in Google’s case, it might just be met with a sigh of relief. For more than a year, an­titrust reg­u­la­tors at Amer­ica’s Depart­ment of Jus­tice have been cir­cling the in­ter­net search gi­ant, and this sum­mer they have been grad­u­ally clos­ing in.

Al­though three other big US tech com­pa­nies – Ap­ple, Ama­zon and Face­book – are in Washington’s crosshairs, Google has long stood out as the most likely can­di­date for mo­nop­oly charges.

The ground­work for build­ing a case against the com­pany has al­ready been laid. Ri­vals such as Yelp have been grip­ing about Google’s con­trol over its search en­gine and the in­ter­net’s ad­ver­tis­ing in­fra­struc­ture for years.

The com­pany has been dealt three com­pe­ti­tion-re­lated fines in Europe, amount­ing to bil­lions of euros. Google is ap­peal­ing all three.

Le­gal ex­perts be­lieve Google has the big­gest case to an­swer. Un­like Ama­zon, Ap­ple and Face­book, which do not have such ob­vi­ously dom­i­nant mar­ket positions, Google ac­counts for at least 80pc of world­wide in­ter­net searches. The web’s sec­ond most pop­u­lar search bar ap­pears on YouTube, which is also owned by Google.

Last week, re­ports emerged that the jus­tice depart­ment’s long-run­ning an­titrust in­ves­ti­ga­tion against Google was com­ing to a close. Ac­cord­ing to The New York Times, William Barr, the US at­tor­ney gen­eral, has been push­ing lawyers for a case against the com­pany to be filed by the end of this month.

Even if this time­line slips, pur­su­ing charges be­fore Novem­ber’s pres­i­den­tial elec­tion is likely to be a pri­or­ity. While Don­ald Trump is un­likely to see crack­ing down on Sil­i­con Val­ley as much of a vote-win­ner (tech com­pa­nies re­main largely pop­u­lar, and barely reg­is­ter as po­lit­i­cal is­sues next to the pan­demic, the eco­nomic cri­sis and so­cial divi­sion), ap­pear­ing to take ac­tion against Google will at least look like a proac­tive step. Per­haps more im­por­tantly, it would be a vic­tory for Barr, who would be re­placed in a Bi­den ad­min­is­tra­tion.

But at the same time, the ur­gency to bring charges has led to fears it could be a hastily pre­pared case. Sev­eral jus­tice depart­ment lawyers have re­port­edly stepped away from the in­ves­ti­ga­tion or said they will refuse to en­dorse charges, fear­ing they will not be strong enough to tri­umph in US courts.

State-level prose­cu­tors, who have been separately in­ves­ti­gat­ing the com­pany, are also said to be split along po­lit­i­cal lines as to whether to join the jus­tice depart­ment.

Stalling may be un­war­ranted. Lawyers are likely to ask for more time on just about any­thing, and reg­u­la­tors have had plenty of time to study Google’s al­legedly anti-com­pet­i­tive tac­tics. But any sug­ges­tion that a case will have been hastily put to­gether is likely to con­cern any­one who be­lieves the com­pany’s power should be cur­tailed.

Un­like the mo­nop­oly en­force­ment model typ­i­cally em­ployed in Europe, in which com­pa­nies are fined then have the op­tion of a lengthy le­gal ap­peal, US prose­cu­tors who are un­able to set­tle an in­ves­ti­ga­tion must ar­gue their case in court to se­cure pu­n­ish­ment. And when they try, they of­ten lose.

In Au­gust, a US judge shot down claims from the Fed­eral Trade Com­mis­sion that chip­maker Qual­comm had un­fairly pushed out ri­val com­pa­nies. Last year, the jus­tice depart­ment failed to get a court to undo a merger be­tween AT&T and Time Warner. A long his­tory of US case law has made it ex­ceed­ingly dif­fi­cult for the gov­ern­ment to win mo­nop­oly cases, es­pe­cially when a ser­vice is pro­vided for free to the con­sumer, as it is with Google.

All of this means that if the world’s big­gest search en­gine is to face com­pe­ti­tion charges in its home mar­ket, any case must be air­tight. Lawyers aban­don­ing the case be­cause they fear it is be­ing rushed does not sug­gest it will be. It is fair to say that Google would rather fight a hastily put-to­gether le­gal chal­lenge now than a com­pre­hen­sive one later.

The pic­ture that emerges is of a sys­tem that looks set up not to tame the tech giants, even if con­cerns about them are le­git­i­mate. Even when tak­ing ac­tion against Google has sup­port from both par­ties, and prose­cu­tors have no short­age of com­plaints to in­ves­ti­gate, the prospects for a suc­cess­ful chal­lenge against the com­pany, let alone the break-up that some would ad­vo­cate, are un­clear. The same could be true for Ama­zon, Face­book and Ap­ple.

The more likely path to US com­pe­ti­tion crack­downs against Sil­i­con Val­ley could be new laws, a prospect that a Con­gres­sional com­mit­tee is in­ves­ti­gat­ing, but which might prove dif­fi­cult in to­day’s grid­locked Washington.

While tak­ing ac­tion against the tech giants is a rare bi­par­ti­san is­sue in Washington, Repub­li­cans and Democrats want dif­fer­ent things. One side claims Sil­i­con Val­ley is cen­sor­ing speech, the other that it is cen­tral­is­ing power and amass­ing too much wealth. The pro­posed so­lu­tions dif­fer, which partly ex­plains why no sig­nif­i­cant tech reg­u­la­tion has come into force de­spite a widespread clam­our for some­thing to be done.

A new face in the White House may be able to break that grid­lock.

But for now, Washington seems ill-equipped to take on Big Tech.

‘Prose­cu­tors must ar­gue mo­nop­oly cases in the US in court – and they of­ten lose’

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